AM — FRA cuts EGX trading fees by 20%, delays margin caps.
Plus: The Royals are here.

Good morning, friends — we’ve nearly made it through another workweek together and we hope you’re looking forward to a weekend with family and friends. With apologies to the Colonel (bless his Fenian soul) the top news story of the day looks set to the arrival in Cairo today of Prince Charles and Camilla for a two-day visit to Egypt — their first in over a decade. The pair will hold talks with President Abdel Fattah El Sisi at the Ittihadiya Palace and meet Sheikh Ahmed El Tayeb today before traveling to Alexandria tomorrow.

Expect environmental issues to be top of the agenda: The Prince of Wales will discuss with the president Egypt’s environmental initiatives and the country’s selection as host of next year’s COP27 climate conference. The prince will also plug his Sustainable Markets Initiative, which launched last year to channel investment into green businesses.

PSA- Our favourite weather app is still calling for showers on Saturday — and now Sunday, too. Don’t expect a torrential downpour, but we could see as much as 5mm of rain between the two days.

NEED TO GEEK OUT a bit this weekend? Head over to the Financial Times and hit this link for its 2021 best books of the year series. There are suggestions on everything from business to economics, climate, politics, tech and the arts.

ALSO- The FT is rethinking its homepage. We’re still digesting the slightly less-dense look and feel. If it doesn’t come up automatically for you, try typing in this URL: https://www.ft.com/home-beta.

THE BIG STORIES ABROAD-

Biden wants to investigate Big Oil for price fixing: The Biden administration is backing an investigation into whether the country’s biggest energy companies are engaging in “illegal conduct” to keep gas prices high. In a letter to the country’s competition watchdog, Biden claimed that there is “mounting evidence of anti-consumer behavior by oil-and-gas companies,” citing a gap between the prices of unfinished gasoline and the price at the pump. This comes as pressure rises on Biden to get a handle on surging inflation, which reached its highest level since 1990 last month. The Financial Times and the Wall Street Journal both have the story.

Speaking of gas: European gas prices are once again on the rise after Berlin indicated that it would delay the opening of Russia’s Nord Stream 2 pipeline until March, Reuters writes. Yesterday the price of gas in the Netherlands — a benchmark for Europe — jumped 8% to EUR 101.60 euros per megawatt-hour. It has now risen 60% so far this month though remains far below the record EUR 155 price set in October.

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CIRCLE YOUR CALENDAR-

AUC and the Egyptian Private Equity Association (EPEA) will host a panel on developments and regulatory changes in the stock market. The gathering takes place at the Tahrir campus in Downtown on Sunday, 21 November at 6pm, according to a press release (pdf). EGX Chairman Mohamed Farid, Sovereign Fund of Egypt Chief investment Officer Abdalla ElEbiary and managing director and chief investment officer at Nile Capital Holding Basel Roshdy will all make appearances.

Entrepreneurs aged 18-35 have until 23 December to register for TotalEnergies’ Startupper of the Year Challenge. The competition is open for a business creation project or startup under three years old in any sector. Candidates can apply here.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

EGX fees are set to be cut and planned caps on margin trading could be delayed as the government looks to cushion the impact of the planned capital gains tax on EGX trades. In a meeting led by the Financial Regulatory Authority (FRA) yesterday, policymakers agreed to cut trading, clearance and regulatory fees by 20% and to delay by six months the introduction of new restrictions on how much investors can borrow to trade shares. The regulator announced the moves in a series of statements (here (pdf) and here (pdf)).

The trigger: Capital gains tax is coming and investors aren’t happy. Confirmation in September that the government would push ahead with the introduction of a 10% tax on capital gains made by resident investors has not gone down well with retail investors or the securities industry. Investors, analysts and MPs have warned that an additional tax could stifle trading volumes on an already-depressed market and make the bourse even less attractive to foreign investors.

Retail investors account for the majority of activity in the market on most days, and pundits worried the proposed cap on margin trading could depress trading activity if it came into place at the same time as the 10% CGT.

Cue the sweetener: Amid calls to scrap the tax outright, the government last week unveiled a package of tax breaks and fee cuts aimed reducing the impact of the CGT and keep retail investors in the market, among them is the cut to EGX fees which the FRA, EGX and Misr Clearing officials discussed yesterday. The fees include those paid on each transaction to the EGX and Misr for Central Clearing, regulatory fees paid to the FRA and payments to the Investor Protection Fund.

Also: All fees will be classified as expenses, meaning investors paying taxes here will be allowed to use them to offset their tax bill.

AND- The EGX and FRA are going to continue their discussions on potentially loosening caps on intraday share price movements. A separate proposal under study would also see a subset of regulations that would impose specific intraday price movement caps on volatile and high-risk stocks that would be separate from the general market limits.

Regulators also seem to be easing off the introduction of new restrictions on margin lending: The FRA yesterday agreed to hold off introducing the caps for up to six months, meaning they may not come into effect until the middle of 2022. The is a signal that the regulator wants to keep the market moving smoothly, FRA Deputy Chairman Islam Azzam said in an interview with CNBC Arabia (watch, runtime: 8:14).

A refresher: Designed to mitigate financial risk, the rules would place new limits on how much investors can trade on margin, prohibiting them from either purchasing more than 3% of a company’s market cap or 5% of its freefloat shares (whichever is higher). Companies would be restricted from having more than 15% of their outstanding shares held on margin or 30% of its publicly-traded shares (whichever is higher).

It appears that the margin trading regulations will be more detailed than we thought: The FRA will now look at a proposal from the bourse that would regulate the volume of margin trades brokerages are allowed for each security.

Anghami to complete SPAC merger + list on Nasdaq in December: Emirati music streaming service Anghami will pull the trigger on its SPAC merger and list on the Nasdaq at the end of December, Hossam El Gamal, the company’s VP for North Africa, told Enterprise. The Abu Dhabi-based company is merging with blank-check firm Vistas Media Acquisition Company in a transaction that implies an enterprise value of around USD 220 mn (pdf). Bloomberg, citing unnamed sources, reported earlier this year that the company could be worth some USD 300 mn following the listing. Gamal declined to confirm the transaction value when we asked yesterday.

Who’s in? The SPAC has raised at least USD 40 mn, with USD 30 mn coming from Shuaa Capital and USD 10 mn from Vistas’ parent company. Shuaa led a funding round for Anghami earlier this year and is acting as its financial advisor and underwriter in the transaction.

About Anghami: The company says it has more than 70 mn registered users, receiving around 1 bn streams each month. Revenues have jumped 80% since 2018 and are projected to rise five-fold over the coming three years. It will have around USD 142 mn in cash on its balance sheet when the transaction closes, which will be deployed for further expansion.

Part of the proceeds from the listing will be allocated for investment in its operations in Egypt and Saudi Arabia. “We want to have a deeper penetration into high-growth, high revenue markets,” co-founder Elie Habib told Bloomberg earlier this year.

Anghami and Egypt-grown, UAE-based Swvl are in a race to become the first Middle Eastern tech company to list on the Nasdaq: The Egyptian mass transportation app is also hoping to close its blank-check merger and list on the exchange in December or January.

Israel is in talks to set up solar power plants in Egypt as part of a broader strategy to cut carbon emissions and boost its green tech sector, Bloomberg reports. Yair Pines, director general of the Israeli prime minister’s office, tells the business news information service that whether these plans progress depends in part on whether reliable transmission and storage infrastructure can be established.

Egypt isn’t the only country on Israel’s radar: Tel Aviv is also in talks with Jordan, Greece and Cyprus to set up joint PV facilities in their territories.

What isn’t clear is where this energy will go: According to Pines, the plants would be linked to the respective countries’ energy grids, opening up the possibility for Egypt to increase solar’s contribution to its energy mix. What seems more likely though is that these facilities will ship most of the electricity back to Israel, helping it to meet its new target to obtain 30% of its energy from renewable sources by 2030.

Why build here? The scarcity of land in Israel. Pines makes clear that our neighbor’s small, and densely-populated territory is one of the key things driving the government to explore projects in neighbouring territories.

Egypt also has ambitious renewable energy goals: The government wants to increase renewable energy capacity to cover 42% of the country’s electricity needs by 2030, up from just 10% currently.

IN OTHER ENERGY NEWS-

NPCC + Petrojet to work on EPC projects: Abu Dhabi’s National Petroleum Construction Company (NPCC) will work with state-owned Petrojet to explore engineering, procurement and construction projects in the UAE and Egypt, the company said yesterday after signing the MoU.

Egyptian medical tech company Teams has signed a USD 300 mn agreement with the University of Texas Medical Branch to set up a campus in Egypt, Teams co-founder Hossam Badrawi told Al Mal. Teams is currently deliberating between Sheikh Zayed and Al Salam City for the new campus, which will include colleges of nursing, public health, medical sciences, and policies. The company has secured 25% of the necessary financing from unnamed Chinese investors, Al Mal claims, and has signed initial agreements with unnamed Egyptian individual investors, businesses, and banks for further financing.

Hossam Badrawi is an MD — and former member of parliament who built and ran the Nile Badrawi Hospital before selling it to now-EGX-listed Cleopatra Hospitals Group.

Why is a foreign university setting up shop here, again? International universities have been allowed to establish branches in Egypt by building a new campus or partnering with an Egyptian company since 2018, when the government ratified the International Branch Campus Act. The program has largely been successful, with several international universities moving to open branches in Egypt, which industry figures we’ve spoken with attributed to the government’s light-touch regulatory approach to the system.

It was a legislation-heavy day around the cabinet table yesterday with ministers approving a number of bills during the weekly meeting. Among the changes:

Sports clubs will soon be subject to more financial oversight from centralized government bodies under changes to the 2017 Sports Act. The changes also explicitly prohibit the use of performance-enhancing substances. Egyptian weightlifters were banned from international competitions for two years after a number of athletes were caught doping in 2016.

Sharm El Sheikh and Dahab are no longer subject to the state’s Sinai Development Act, after the cabinet approved a presidential decree in February exempting them from the legislation.

Sohag University is getting two new faculties, one for environmental research and another for postgraduate studies under changes to the executive regulations of the Universities Act.

New rules on organ donations: Kidney donors must now be younger than 60 years old and donors of other organs younger than 50 under amendments to a law regulating organ donations.

The Health Ministry reported the highest single-day death toll from covid-19 since mid-July 2020, saying in a statement that 71 people lost their lives yesterday as a result of the virus.

Cases have been elevated for more than a month, with the ministry consistently reporting more than 900 new infections each day since late October. Yesterday’s figures showed that 960 fresh cases were reported, the highest daily figure since the end of May, and taking the country’s overall tally to 346,808. The total death toll now stands at 19,707.

Pfizer has applied to the FDA for emergency approval of its antiviral covid pill, according to a company press release, in a move that could see the drug rolled out in the US by the end of the year. Pfizer on Tuesday said it would allow drugmakers in low and middle-income countries to produce generic versions of Paxlovid under a UN patent-sharing scheme. A late-stage trial on the drug was wrapped up ahead of schedule last week, after interim results found it cut the risk of hospitalization or death in high-risk patients by 89%.

EFG Hermes’ net income dropped 16% y-o-y to EGP 356 mn in 3Q2021, according to its quarterly earning release (pdf). The financial services group’s revenue fell 17% to EGP 1.2 bn during the quarter mainly due to an unfavorable base effect related to a one-time private equity incentive fee booked in 3Q2020 for selling a controlling stake in its UK solar energy portfolio Vortex III.

On a nine-month basis, the group’s net income rose 26% y-o-y to EGP 1.1 bn on the back of strong revenue growth from the Vortex III exit and “strong unrealized and realized gains on investments booked in 9M2020.” EFG Hermes’ revenues were up 8% y-o-y during 9M2021 to EGP 4.0 bn, while group operating expenses were muted, inching down 1% y-o-y to EGP 2.5 bn in 9M21. 

In detail: Buy-side revenues declined 74% to EGP 115 mn due to last year’s Vortex III exit and a “very weak” quarter for its capital markets and treasury operations segment, which saw revenues fall 58% to EGP 156 mn due to unrealized losses on seed capital revalution. On the sell-side, strong growth in the group’s investment bank and brokerage offset the base effect to rise 45% to EGP 406 mn. Investment banking revenues almost tripled to EGP 107 mn while its brokerage arm brought in EGP 299 mn, up 23% from 3Q2020.

Non banking financial institutions’ revenue grew 52% to EGP 507 mn, supported by microfinancing firm Tanmeyah and consumer finance platform valU. Tanmeyah reported revenues of EGP 355 mn, up 36% from 3Q2020, while valU continued to outperform, with revenues more than tripling to EGP 97 mn.

Looking ahead: “We are excited about the headway we are making in line with our strategy to transform into a full-fledged universal bank in Egypt,” said (pdf) CEO Karim Awad. “We are confident that as we continue to leverage our robust operational capacities and diverse lines of business, the group is well-positioned to close out 2021 on a strong note.”

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Orascom Construction (OC)’s bottom line dipped 6% y-o-y to USD 28.4 mn in 3Q2021, according to its earnings release (pdf). Revenues rose 4% y-o-y to USD 857.7 mn, 68% of which came from operations in the Middle East and Africa, and the US the remainder. Operating cashflow for the first nine months of the year remains negative at USD -114 mn though cashflow turned positive in 3Q, coming at USD 42.8 mn.

The company’s consolidated backlog hit a new record of USD 6 bn as of the end of September, after new awards climbed 42.7% y-o-y to USD 962.4 mn for the quarter. This comes on the back of its newly signed contract for construction of Egypt’s first high-speed rail system as well as “sizable” contracts in the US student housing sector. Pro forma backlog including the company’s 50% share in Besix increased 15% y-o-y to USD 8.9 bn as of the end of the quarter. Pro forma new awards rose 85.8% y-o-y to USD 1.7 bn.

“We achieved several operational milestones this quarter. We witnessed in Egypt the completion and inauguration of Bahr El Baqar Water Treatment Plant, the largest in the world, and are working in full swing at our large projects such as the monorail in Egypt and data centers in the US,” said CEO Osama Bishai.

EDITOR’S NOTE: This story was corrected on 18 January, 2021. A previous version of the story stated an incorrect figure for the value of Orascom Construction’s consolidated backlog. 

Our friends at Kashat, the region's first provider of nano-financial services, have added Marija Zivanovic-Smith (LinkedIn) as an independent board member. Based in Washington, DC, Zivanovic-Smith sits on the executive leadership team of NCR, the original fintech player and a global leader in enterprise technology for restaurants, retailers and banks. NCR is the number one global POS software provider for retail and hospitality and the top provider of multi-vendor ATM software.

Kashat has more than doubled its addressable market: Zivanovic-Smith’s joining comes just after Kashat has rolled out its services in Menia, Assiut, Sohag and Qena. Together with its integration with mobile network operator Etisalat, Kashat has grown its serviceable market to 67 mn Egyptians from 30 mn previously. The company closed a USD 1.75 mn bridge round in September.

KUDOS- Rameda Pharma’s very own Yasmine Negm (LinkedIn) is among the 32 women selected for the International Women’s Forum’s Leadership Fellows Program. The prestigious 20-day program provides leadership training to promising business women from around the world in partnership with Harvard Business School and INSEAD.

Seventeen Egyptian projects claimed awards at Mashreq’s 2021 MEED Project Awards. National laureates included Orascom Construction, Hassan Allam Holding, ACE Consulting Engineers, Arab Contractors, EHAF Consulting, the Egyptian Electricity Transmission Company, Petrojet, Concord Engineering and Contracting, and Khatib & Alami.

Egyptian feature film Feathers bagged the grand prize and three further awards at the Carthage Film Festival, according to a statement from the festival’s organizers yesterday. Along with the prize for best film, writer-director Omar El Zohairy’s debut also clinched the award for best screenplay and the Tahar Cheriaa prize dedicated to the festival’s founder. The film’s lead star, Demyana Nassar, bagged the prize for best female performance.

Egyptian-Canadian author Omar El Akkad snagged a prestigious Canadian literature award for his novel, What Strange Paradise, depicting the global refugee crisis through the eyes of a child. (The Arab Weekly)

It was nice and quiet on last night’s talk shows with not many stories making noise on the airwaves:

What should we make of the new rules on organ donations? New amendments to the law regulating organ donations, which entail that kidney donors must be younger than 60 years old and donors of other organs younger than 50, got the greenlight from the cabinet yesterday. But these amendments aren’t all that great, according to transplant expert Mohamed Ghoneim who told Yahduth Fi Masr (watch, runtime: 3:39) that age isn’t much of an issue when it comes to organ donation, but rather the health condition of the donor. He added that these amendments don’t address the main issue that arises from organ donation — organ trading — and therefore we need an organization to take over the responsibility of how the organs are donated and monitor the process.

Apparently our education system is better than we thought: Egypt ranked 39th in the US News education ranking of 78 countries, up three spots from last year’s ranking. Ala Mas’ouleety (watch, runtime: 2:35) had the story.

The foreign press is shifting its attention away from Aswan back to criminal justice and human rights this morning, with the Associated Press and Reuters picking up yesterday’s sentencing of Zyad El Elaimy to a five-year stint in jail for spreading false information. A former MP and human rights lawyer, El Elaimy was on trial alongside two journalists, all three of whom have been detained since 2019 on charges associating with the Ikhwan.

More human rights: The Washington Post has a run-down of criticism being levelled at Egypt ahead of COP27, which focus on the country’s dependence on fossil fuels and human rights record. Meanwhile, the new emergency legislation covering pandemics that was passed by lawmakers yesterday is getting coverage in the New York Times. The bill hands the prime minister the power to shut down large swaths of the economy and the country during health crises — the same basic measures as were imposed last year at the beginning of the pandemic. The New York Times report emphasizes provisions in the bill that would authorize authorities to crack down on people who publish information officials deem fake.

Wheat tender price rises again: GASC bought 60k tonnes of Romanian wheat in an international tender for shipment between 1-15 January at USD 346.97 per tonne, Reuters reports. This price is more than 4% higher than the previous tender, which saw the state grain buyer pay an average price of USD 332.30 a tonne for Russian wheat at the beginning of November. Egypt’s international tenders are fetching the highest prices in at least half a decade as weak harvests, surging fertilizer prices and higher shipping costs push global prices to 10-year highs.

Orascom, Samcrete and Hassan Allam have been awarded a contract to establish four warehouses in Sharqia, Suez, Fayoum and Luxor following cabinet approval, according to Hapi Journal. The contracts will be signed as soon as they are reviewed.

Egypt + Qatar are working together on Gaza reconstruction: Egypt and Qatar have signed an agreement to provide the Gaza Strip with fuel and basic building materials, the Qatari Foreign Ministry announced yesterday. This came during a ministerial meeting of the Ad Hoc Liaison Committee (AHLC), the international donor group for Palestinians. Egypt recently played an instrumental role in brokering a ceasefire between Israel and Hamas to end the conflict in May, and has pledged to provide USD 500 mn to help reconstruct the embattled enclave.

Egypt has been re-elected to the Unesco executive council for another four-year term, the Foreign Ministry said yesterday.

Dara Ghosheh, founder of Dara’s Ice Cream: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Dara Ghosheh, founder of Dara’s Ice Cream (LinkedIn). Edited excerpts from our conversation:

My name is Dara Ghosheh. The most important things to know about me: I’m Palestinian, I have two boys, and I love to eat ice cream.

Because we are a startup, my day is very dynamic — no two days are identical. I arrange my day in the morning according to what’s on my plate. I usually wake up at 6am, or later if I stayed up. I just gave birth four months ago, so my sleep schedule isn’t exactly set in stone. I either wake up and play with my newborn, or (if I wake up early enough) send off my four-year-old to school. Then, once my newborn goes down for his nap, I head off to work.

I only take Fridays off — and sometimes end up working then, too. I visit my shops, all of which are in different areas, so it’s never a fixed routine. I also usually go to my factory in the 6 October industrial zone, and I have a weekly meeting with my store managers. I try to finish work around 4-5pm to spend time with my sons before I put them to bed by 8pm as they have a strict bedtime routine.

I still remember the moment I decided to launch Dara’s. I’ve always been obsessed with ice cream — I can eat it for every meal. Whenever I travel with my husband, we explore the best gelaterias in town. We once discovered an ice cream shop that I was extremely impressed with. I was trying to convince my husband to buy six flavors because I wanted to try them all and in Europe, they don't allow you to try before you buy. So he said, “Dara, if you're that obsessed, why don't you have your own shop?” And hence the idea was born.

I took a course and started to discover the world of ice cream and gelato in 2017. For the next two years, I started to experiment at home, save money and buy machines, with my husband’s help. He’s more business-minded than me but this was never a business for me. I love what I do and I do it for passion and fun.

I began testing so many different recipes. I burned the honeycomb maybe 50 times before I got it right to create our signature honeycomb flavor. It’s very difficult to introduce a new flavor because I always want to perfect it. Traveling a lot helps me with creating flavors, but the pandemic cut off that source of inspiration. I didn’t want to limit myself to the classic Italian way — I was more inspired by how ice cream is made in the US, which centers on creating an experience in your mouth. So it's all about different textures, different sauces and different flavors matching each other.

Covid-19 was a bit overwhelming because I couldn't go to work. But, it made us think of what we want to do and where we want to go. We worked on one of our biggest projects — launching pints at Gourmet, which my son actually worked on by helping us create designs.

There is a lack of quality and natural ingredients in ice cream. It’s not just in Egypt: In Europe, they more often use ready mixes and don’t have anything homemade. For me, I bake everything in my kitchen. That’s why I’m always experimenting with new items that are all handmade. There’s always room for improvement.

I think we created an ice cream hangout: It’s all about the experience. I always felt ice cream shops are not really a happy place. I am supposed to be going to eat the best thing in the world. I want to try different flavors, not just a speck on a tiny plastic spoon. So I created the experience with these details in mind. My goal is to make people happy — not only my customers, but my team, too. I want to make a difference in the market and in my community. I want to create jobs. I want to improve lives.

I watch one thing with my husband every day: We’re currently watching Squid Games like everyone else. I have mixed feelings about it. Usually I’m into this type of stuff; I love Black Mirror and find it very realistic. But this is just too much. I'm also watching Maid, which is about women and violence. It's really nice. When I want something chill, I honestly love watching Friends, even if I’ve watched it a hundred times.

I’m kind of late to the game but podcasts are my newest obsession. I’m interested in learning more about management and how to manage the team and the company. I’ve found podcasts to be a way to put my time to good use, so I often listen when I’m in the car. The last thing I listened to was Goal Digger, which often resonates with me.

I'm interested now all of a sudden in pilates. Since I don’t have a lot of down time, I started doing online pilates sessions twice a week. I used to work out five times a week. And now with two boys, it’s a mess. I don’t allow my kid to watch TV except twice a week. So while he's watching TV, I work out from 6 to 7pm. This is the time he watches TV and I do my workout.

The best two pieces of advice I've been given: My husband always tells me, “Dara, delegate. If you don't delegate, you'll crash.” I try to as much as I can, but honestly I’m not 100% effective at delegating. The second is more of a life lesson — my parents brought me up to be grateful for everything, kind, and down to earth.